Almost a third of small business managers are unaware of the rise in the national minimum wage (NMW), due to take effect on 1 October 2008.
The Federation of Small Businesses (FPB) has warned its members that they will face prosecution and fines up to £5,000 if they do not comply with the increase.
For workers aged 22 and over, the hourly rate will increase by 21 pence to £5.73 per hour. Employees aged 18 to 21 will be entitled to a rise of 17 pence, to £4.77 an hour, and the hourly rate for those aged 16 and 17 will rise by 13 pence to £3.53.
However, the FPB claims the change is likely to come as a nasty shock to small businesses especially among those with four members of staff or under, where 44% are totally unaware of the pending increase, according to research carried out by Bibby Financial Services.
Nick Palin, the FPB’s director of finance, said that although there is a cost involved, the price of non-compliance will be even higher. “Recent examples show that the government is more than willing to prosecute firms if they are in breach of the legislation,” he said.
However, the increase could put an extra pressure on small firms already over-burdened by the difficult economic conditions, said David Robertson, chief executive of Bibby Financial Services.
“At a time when business costs are escalating rapidly, as the credit crunch continues to bite and fuel costs soar, the rise in the national minimum wage could put a significant strain on many small businesses’ cash flow,” he warned.
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